EXHIBIT 11.3 NATIONAL MEDICAL ENTERPRISES, INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF PRO FORMA PER SHARE EARNINGS* SIX MONTHS ENDED NOVEMBER 30, -------------------- YEAR ENDED MAY 31, 1994 1993 1994 ------------ --------- --------- PRO FORMA PRO FORMA PRO FORMA COMBINED COMBINED COMBINED ------------ --------- --------- (AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) FOR PRIMARY EARNINGS PER SHARE Shares outstanding at beginning of period..... 165,898 165,898 166,081 Shares issued upon exercise of stock options.. 60 8 171 Dilutive effect of outstanding stock options.. 1,114 198 2,138 Shares issued as grants of restricted stock, net of cancellations......................... (48) (11) -- Shares assumed issued in the Merger........... 33,190 33,190 33,190 -------- -------- -------- Pro forma weighted average number of shares and share equivalents outstanding............ 200,214 199,283 201,580 ======== ======== ======== Pro forma income from continuing operations before cumulative effect of a change in accounting principle......................... $214,521 $ 75,008 $103,146 ======== ======== ======== Earnings per share from continuing operations before cumulative effect of a change in accounting principle......................... $ 1.07 $ .38 $ .51 ======== ======== ======== FOR FULLY DILUTED EARNINGS PER SHARE Pro forma weighted average number of shares used in primary calculation.................. 200,214 199,283 201,580 Additional dilutive effect of stock options... 97 44 168 Assumed conversion of dilutive convertible debentures................................... 13,966 13,978 12,909 -------- -------- -------- Pro forma fully diluted weighted average number of shares............................. 214,277 213,305 214,657 ======== ======== ======== Pro forma income from continuing operations used in primary calculation.................. $214,521 $ 75,008 $103,146 Adjustments for interest expense, contractual allowances and income taxes.................. 5,981 2,491 3,728 -------- -------- -------- Adjusted pro forma income from continuing operations used in fully diluted calculation. $220,502 $ 77,499 $106,874 ======== ======== ======== Pro forma earnings per share from continuing operations before cumulative effect of a change in accounting principle............... $ 1.03 $ .36 $ .50 ======== ======== ======== - ------------------ * All shares in these tables are weighted on the basis of the number of days the shares were outstanding or assumed to be outstanding during each period.